Always thought a guy as smart as you could easily differentiate. In that you seem to worry, I understand your post. Oh, and liars wear both suits in politics.dajo9 said:You'll take free speech even if it benefits autocratic liarsOdontoBear66 said:Understand that as I think he does. Big difference he can afford it. You and I probably not. Being a contrarian and libertarian of sorts, I just love the zingers he is shooting across the bow. Sounds like a bunch of nervous nillies at Twitter. 90% plus of you know what persuasion. I'll take free speech whether it benefits moderates, conservatives or even liberals.DiabloWags said:OdontoBear66 said:Very true, but when he started playing games with the company twas time to out for safety. Downside potential became greater than upside winnings.DiabloWags said:OdontoBear66 said:Makes it even better from my glance.Unit2Sucks said:
Twitter employees and stockholders may not agree.
Unless you're a TSLA shareholder.
I just marvel at all the people I would suspect would be all for shutting down woke and increasing free speech as in the 60s are totally against.
You do realize that Musk has a "binding" agreement to purchase Twitter, right?
If he bows out it's gonna cost him a $1.0 Billion break up fee.
That's the downside of playing "games".
For some reason, he's been sounding more like "the Dog ate my homework" with his excuse about Spam.
US Inflation - it could be worse
148,258 Views |
1312 Replies |
Last: 1 yr ago by movielover
DiabloWags said:cbbass1 said:
And WHO sets retail gasoline prices??
It doesnt matter who sets retail gas prices.
It's who has pricing power for the underlying commodity, crude oil.
That would be OPEC+ who produces 40% the world's crude oil production and accounts for 60% of petroleum traded globally. They're the 800 lb. Gorilla in the room.
But most average Joe's are economically illiterate.
They think that the President of the United States sets gas prices, mortgage rates, etc.
Just ask the typical Trumpanzee.
You just called cbbass1 a Trumpanzee. LOL.
OdontoBear66 said:Understand that as I think he does. Big difference he can afford it. You and I probably not. Being a contrarian and libertarian of sorts, I just love the zingers he is shooting across the bow. Sounds like a bunch of nervous nillies at Twitter. 90% plus of you know what persuasion. I'll take free speech whether it benefits moderates, conservatives or even liberals.DiabloWags said:OdontoBear66 said:Very true, but when he started playing games with the company twas time to out for safety. Downside potential became greater than upside winnings.DiabloWags said:OdontoBear66 said:Makes it even better from my glance.Unit2Sucks said:
Twitter employees and stockholders may not agree.
Unless you're a TSLA shareholder.
I just marvel at all the people I would suspect would be all for shutting down woke and increasing free speech as in the 60s are totally against.
You do realize that Musk has a "binding" agreement to purchase Twitter, right?
If he bows out it's gonna cost him a $1.0 Billion break up fee.
That's the downside of playing "games".
For some reason, he's been sounding more like "the Dog ate my homework" with his excuse about Spam.
Has anyone seen the allegedly "binding" agreement? Has it been filed with the SEC?
Most agreements have contingencies, representations, and covenants (e.g., providing accurate information), etc. Corporate deals often have "material adverse change" provisions that give the buyer an out.
If, as Musk has implied, Twitter has been making misleading SEC filings, then that strikes me as a real issue and the discovery of that would be a MAC. But it will depend on what is in the agreement.
Given that the break up fee is $1B, it will be a hell of a lawsuit if they don't work it out.
Filed April 25, 2022BearGoggles said:
Has anyone seen the allegedly "binding" agreement? Has it been filed with the SEC?
DEFA14A (sec.gov)
Enjoy!
Thank you.DiabloWags said:Filed April 25, 2022BearGoggles said:
Has anyone seen the allegedly "binding" agreement? Has it been filed with the SEC?
DEFA14A (sec.gov)
To 30 seconds to scan the agreement and searched for "Company Material Adverse Effect". It is all over the place, including 4.6, 4.9(b), 4.16(b) (SEC misrepresentations could impact third part contracts, such as advertising).
I am not a corporate attorney, but my understanding is there has been extensive litigation and case law related to MAEs. I have no idea if what Musk is alleging falls in that category but my wild ass guess is that the discovery of misleading SEC filings is potentially an MAE.
dimitrig said:OdontoBear66 said:Understand that as I think he does. Big difference he can afford it. You and I probably not. Being a contrarian and libertarian of sorts, I just love the zingers he is shooting across the bow. Sounds like a bunch of nervous nillies at Twitter. 90% plus of you know what persuasion. I'll take free speech whether it benefits moderates, conservatives or even liberals.DiabloWags said:OdontoBear66 said:Very true, but when he started playing games with the company twas time to out for safety. Downside potential became greater than upside winnings.DiabloWags said:OdontoBear66 said:Makes it even better from my glance.Unit2Sucks said:
Twitter employees and stockholders may not agree.
Unless you're a TSLA shareholder.
I just marvel at all the people I would suspect would be all for shutting down woke and increasing free speech as in the 60s are totally against.
You do realize that Musk has a "binding" agreement to purchase Twitter, right?
If he bows out it's gonna cost him a $1.0 Billion break up fee.
That's the downside of playing "games".
For some reason, he's been sounding more like "the Dog ate my homework" with his excuse about Spam.
Elon Musk just now figured out that there are a lot of bots on the Internet?
He's just looking for an out.
Elon Musk's epic reaction to Twitter claiming that the number of real unique humans that you see making comments on a daily base is above 95%. 🤣🤣🤣🤣 @elonmusk pic.twitter.com/6xnlA0KQ90
— DogeDesigner (@cb_doge) May 17, 2022
No, Musk wants to know what percentage of Twitter users are bots. It's probably the same percentage of left wing bots on this site.
Of course there has.BearGoggles said:
I am not a corporate attorney, but my understanding is there has been extensive litigation and case law related to MAEs. I have no idea if what Musk is alleging falls in that category but my wild ass guess is that the discovery of misleading SEC filings is potentially an MAE.
But where in the SEC docs are there misleading MAE's regarding spam accounts?
I guess that would depend on whether or not Twitter has SEC filings that contain any MATERIAL claims regarding spam accounts being less than 5% of its daily active user accounts.
Musk is claiming that it is 20% without citing a source.
Twitter (TWTR) suspends "over half a million spam accounts every day," CEO Agrawal wrote.
He also reiterated the 5% statistic, saying that estimate is based on "multiple human reviews ... of thousands of accounts" sampled at random. Twitter has previously acknowledged that while it believes its estimates to be "reasonable," the measurements were not independently verified and the actual number of fake or spam accounts could be higher.
Agrawal said Twitter had been in touch with Musk on the spam issue.
"We shared an overview of the estimation process with Elon a week ago and look forward to continuing the conversation with him, and all of you," he added.
BearForce2 said:
No, Musk wants to know what percentage of Twitter users are bots. It's probably the same percentage of left wing bots on this site.
Another cool story bro.
Most spam campaigns on Twitter (according to the CEO) use a combination of humans and automation, rather than being primarily led by bots.
DiabloWags said:BearForce2 said:
No, Musk wants to know what percentage of Twitter users are bots. It's probably the same percentage of left wing bots on this site.
Another cool story bro.
Most spam campaigns on Twitter (according to the CEO) use a combination of humans and automation, rather than being primarily led by bots.
Bro, Agrawal tweeted that internal bot count estimates are actually "well below" the reported 5%. Musk tweeted back with an image of a turd emoji, bro.
BearForce2 said:DiabloWags said:BearForce2 said:
No, Musk wants to know what percentage of Twitter users are bots. It's probably the same percentage of left wing bots on this site.
Another cool story bro.
Most spam campaigns on Twitter (according to the CEO) use a combination of humans and automation, rather than being primarily led by bots.
Bro, Agrawal tweeted that internal bot count estimates are actually "well below" the reported 5%. Musk tweeted back with an image of a turd emoji, bro.
The nuance regarding spam accounts that Agrawal mentioned appears to have escaped you, bro.
I'll leave it up to you to figure out what that nuance is.
DiabloWags said:BearForce2 said:DiabloWags said:BearForce2 said:
No, Musk wants to know what percentage of Twitter users are bots. It's probably the same percentage of left wing bots on this site.
Another cool story bro.
Most spam campaigns on Twitter (according to the CEO) use a combination of humans and automation, rather than being primarily led by bots.
Bro, Agrawal tweeted that internal bot count estimates are actually "well below" the reported 5%. Musk tweeted back with an image of a turd emoji, bro.
The nuance regarding spam accounts that Agrawal mentioned appears to have escaped you, bro.
I'll leave it up to you to figure out what that nuance is.
I have to think @elonmusk knew this was the case before he moved on Twitter. If Twitter lied about how many actual users they have to the SEC, we're looking at a company that has perpetuated fraud on its shareholders and advertisers. Big trouble for the Twitter commies. https://t.co/hiVPXxZx56
— John Rich (@johnrich) May 17, 2022
Bro, figure out this nuance bro.
BearForce2 said:
Bro, figure out this nuance bro.
When someone is terribly challenged and cant figure out that not all spam comes from BOTS.
The CEO of Twitter made that distinction.
You clearly failed to do so.
DiabloWags said:BearForce2 said:
Bro, figure out this nuance bro.
When someone is terribly challenged and cant figure out that not all spam comes from BOTS.
The CEO of Twitter made that distinction.
You clearly failed to do so.
Bro, are you a bot?
BearForce2 said:
Bro, are you a bot?
No, but you are now on IGNORE.
concordtom said:oski003 said:Don't replace your former conservative echo chamber with a liberal echo chamber. You both talk in absolutes as if the other party is radical.concordtom said:You're going back on my IGNORE list.BearForce2 said:
Inflation sucks but it's also completely irrelevant to the Democrats. Biden has recently said:
1. Systemic racism is our greatest domestic problem.
2. Climate change is our greatest global problem
3. J6 was the worst attack on our democracy since the Civil War
…when in reality, only one is.
How to become a “far right extremist” in 5 years or less:
— No Soup for Knowles (@nosoup4knowles) May 17, 2022
Stand still.
BearForce2 said:concordtom said:oski003 said:Don't replace your former conservative echo chamber with a liberal echo chamber. You both talk in absolutes as if the other party is radical.concordtom said:You're going back on my IGNORE list.BearForce2 said:
Inflation sucks but it's also completely irrelevant to the Democrats. Biden has recently said:
1. Systemic racism is our greatest domestic problem.
2. Climate change is our greatest global problem
3. J6 was the worst attack on our democracy since the Civil War
…when in reality, only one is.How to become a “far right extremist” in 5 years or less:
— No Soup for Knowles (@nosoup4knowles) May 17, 2022
Stand still.
It is a good thing to rethink and evolve one's views over time.
Standing still would mean only white male landowners could vote.
Standing still would allow humans to own other humans.
Standing still would mean we'd still be living under a monarch.
Change is good.
One condition precedent to closing is no violation of reps and warranties and one such R&W was that no SEC filings contain "any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, or are to be made, not misleading." Materially misstating (in this case overstating) the number of actual users violates the contract provision (not to mention violate SEC rules on disclosure such as Rule 10b-5) and have all sorts on consequences. If this is true, Musk could have a lot to different remedies, both contractual ad civil, as could other shareholders. I could see Twitter stock tanking.BearGoggles said:Thank you.DiabloWags said:Filed April 25, 2022BearGoggles said:
Has anyone seen the allegedly "binding" agreement? Has it been filed with the SEC?
DEFA14A (sec.gov)
To 30 seconds to scan the agreement and searched for "Company Material Adverse Effect". It is all over the place, including 4.6, 4.9(b), 4.16(b) (SEC misrepresentations could impact third part contracts, such as advertising).
I am not a corporate attorney, but my understanding is there has been extensive litigation and case law related to MAEs. I have no idea if what Musk is alleging falls in that category but my wild ass guess is that the discovery of misleading SEC filings is potentially an MAE.
I don't understand your first statement. What is a misleading MAE? You seem to be conflating terms.DiabloWags said:But where in the SEC docs are there misleading MAE's regarding spam accounts?BearGoggles said:
I am not a corporate attorney, but my understanding is there has been extensive litigation and case law related to MAEs. I have no idea if what Musk is alleging falls in that category but my wild ass guess is that the discovery of misleading SEC filings is potentially an MAE.
I guess that would depend on whether or not Twitter has SEC filings that contain any MATERIAL claims regarding spam accounts being less than 5% of its daily active user accounts.
Musk is claiming that it is 20% without citing a source.
From Section 4.6 of the Agreement, the Company repped to Musk:
"As of their respective dates, or, if amended or supplemented, as of the date of the last such amendment or supplement, the Company SEC Documents complied in all material respects with the requirements of the Securities Act and the Exchange Act, as the case may be, and the applicable rules and regulations promulgated thereunder, and none of the Company SEC Documents at the time it was filed (or, if amended or supplemented, as of the date of the last amendment or supplement) contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, or are to be made, not misleading."
I don't believe its in dispute that the SEC filings contain the 5% number. So the questions are: (i) is the 5% claim untrue or does the filing omit information/facts necessary to make the 5% statement not misleading; and (ii) if the answer to (i) is yes, was it material? Note that false statements in SEC filings often lead to third party lawsuits - the risk of which might be a MAE irrespective of whether the 5% claim is material.
Bottom line - if they can't find a resolution, the can litigate away. It seems to me that the 5% number is material because, as I understand it, it drives advertising revenue and the overall confidence of the platform. But I'm just spit balling.
And yes - musk is claiming 20% without citing a source in the same way that the company is claiming 5% without showing its data. The company is refusing to turn over the data it claims supports the 5% claim - based on a muddled set of excuses. Neither party has really produced evidence.
Section 6.4 requires the company to provide information to Musk subject to typical limitations/carve outs. Is the Company refusal to provide Musk what he wants within the carveouts? Who knows. Let them litigate that too.
Twitter is in a tough spot. If they don't make a deal, the company will be crippled. The $1B breakage fee will not be adequate.
Edit: Wife beat me to the punch - his post above is more succinct and clearer explanation of the contract.
wifeisafurd said:One condition precedent to closing is no violation of reps and warranties and one such R&W was that no SEC filings contain "any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, or are to be made, not misleading." Materially misstating (in this case overstating) the number of actual users violates the contract provision (not to mention violate SEC rules on disclosure such as Rule 10b-5) and have all sorts on consequences. If this is true, Musk could have a lot to different remedies, both contractual ad civil, as could other shareholders. I could see Twitter stock tanking.BearGoggles said:Thank you.DiabloWags said:Filed April 25, 2022BearGoggles said:
Has anyone seen the allegedly "binding" agreement? Has it been filed with the SEC?
DEFA14A (sec.gov)
To 30 seconds to scan the agreement and searched for "Company Material Adverse Effect". It is all over the place, including 4.6, 4.9(b), 4.16(b) (SEC misrepresentations could impact third part contracts, such as advertising).
I am not a corporate attorney, but my understanding is there has been extensive litigation and case law related to MAEs. I have no idea if what Musk is alleging falls in that category but my wild ass guess is that the discovery of misleading SEC filings is potentially an MAE.
With a caveat that I haven't read the agreement, typically the bring down on the reps would be MAE for a public company deal meaning a breach of reps that isn't an MAE wouldn't cause the condition to fail to be satisfied.
I think there is basically no way Musk will be able to successfully argue that bots on Twitter are an MAE on the business. M&A practitioners have varying views on what could constitute an MAE but I don't think this is even close to the line. This is just Musk being Musk.
dimitrig said:BearForce2 said:concordtom said:oski003 said:Don't replace your former conservative echo chamber with a liberal echo chamber. You both talk in absolutes as if the other party is radical.concordtom said:You're going back on my IGNORE list.BearForce2 said:
Inflation sucks but it's also completely irrelevant to the Democrats. Biden has recently said:
1. Systemic racism is our greatest domestic problem.
2. Climate change is our greatest global problem
3. J6 was the worst attack on our democracy since the Civil War
…when in reality, only one is.How to become a “far right extremist” in 5 years or less:
— No Soup for Knowles (@nosoup4knowles) May 17, 2022
Stand still.
It is a good thing to rethink and evolve one's views over time.
Standing still would mean only white male landowners could vote.
Standing still would allow humans to own other humans.
Standing still would mean we'd still be living under a monarch.
Change is good.
It depends, if you asked Democrats who lost their slaves a 150 years ago, I don't think they would agree that change is good.
Five years ago, a moderate liberal or conservative would support free speech and would reject much of the wokeism culture we see now. The idea that men can be women or that men can get pregnant was extreme then but is less so today. And people, particularly parents, are slowly waking up to this and rejecting it.
Change can be good when it is good. All change is not good.dimitrig said:BearForce2 said:concordtom said:oski003 said:Don't replace your former conservative echo chamber with a liberal echo chamber. You both talk in absolutes as if the other party is radical.concordtom said:You're going back on my IGNORE list.BearForce2 said:
Inflation sucks but it's also completely irrelevant to the Democrats. Biden has recently said:
1. Systemic racism is our greatest domestic problem.
2. Climate change is our greatest global problem
3. J6 was the worst attack on our democracy since the Civil War
…when in reality, only one is.How to become a “far right extremist” in 5 years or less:
— No Soup for Knowles (@nosoup4knowles) May 17, 2022
Stand still.
It is a good thing to rethink and evolve one's views over time.
Standing still would mean only white male landowners could vote.
Standing still would allow humans to own other humans.
Standing still would mean we'd still be living under a monarch.
Change is good.
OdontoBear66 said:Change can be good when it is good. All change is not good.dimitrig said:BearForce2 said:concordtom said:oski003 said:Don't replace your former conservative echo chamber with a liberal echo chamber. You both talk in absolutes as if the other party is radical.concordtom said:You're going back on my IGNORE list.BearForce2 said:
Inflation sucks but it's also completely irrelevant to the Democrats. Biden has recently said:
1. Systemic racism is our greatest domestic problem.
2. Climate change is our greatest global problem
3. J6 was the worst attack on our democracy since the Civil War
…when in reality, only one is.How to become a “far right extremist” in 5 years or less:
— No Soup for Knowles (@nosoup4knowles) May 17, 2022
Stand still.
It is a good thing to rethink and evolve one's views over time.
Standing still would mean only white male landowners could vote.
Standing still would allow humans to own other humans.
Standing still would mean we'd still be living under a monarch.
Change is good.
It is definitely the sign of an educated and thoughtful person to seek out new information and incorporate it into his belief system.
Conservatives by their very nature are afraid of and opposed to change.
dimitrig said:
It is definitely the sign of an educated and thoughtful person to seek out new information and incorporate it into his belief system.
Conservatives by their very nature are afraid of and opposed to change.
I find that most Conservatives want to go back to the days of this man.
Before there was any change for minorities or women.
I guess we can agree he certainly wasn't woke. His humor today would be met with cancelled duct tape.DiabloWags said:dimitrig said:
It is definitely the sign of an educated and thoughtful person to seek out new information and incorporate it into his belief system.
Conservatives by their very nature are afraid of and opposed to change.
I find that most Conservatives want to go back to the days of this man.
Before there was any change for minorities or women.
dimitrig said:OdontoBear66 said:Change can be good when it is good. All change is not good.dimitrig said:BearForce2 said:concordtom said:oski003 said:Don't replace your former conservative echo chamber with a liberal echo chamber. You both talk in absolutes as if the other party is radical.concordtom said:You're going back on my IGNORE list.BearForce2 said:
Inflation sucks but it's also completely irrelevant to the Democrats. Biden has recently said:
1. Systemic racism is our greatest domestic problem.
2. Climate change is our greatest global problem
3. J6 was the worst attack on our democracy since the Civil War
…when in reality, only one is.How to become a “far right extremist” in 5 years or less:
— No Soup for Knowles (@nosoup4knowles) May 17, 2022
Stand still.
It is a good thing to rethink and evolve one's views over time.
Standing still would mean only white male landowners could vote.
Standing still would allow humans to own other humans.
Standing still would mean we'd still be living under a monarch.
Change is good.
It is definitely the sign of an educated and thoughtful person to seek out new information and incorporate it into his belief system.
Conservatives by their very nature are afraid of and opposed to change.
Conservatives want to conserve their values. Liberalism is conservatism's close sibling. What we're seeing in the current government and culture is leftism which has nothing to do with conservatism or liberalism.
"The supreme end of education is expert discernment in all things-the power to tell the good from the bad, the genuine from the counterfeit, and to prefer the good and the genuine to the bad and the counterfeit." - Samuel Johnson
DiabloWags said:
I find that most Conservatives want to go back to the days of this man.
Before there was any change for minorities or women.
I find that Whoopi and Joy Behar are the left's thought leaders.
It's quaint that you think I'm talking about politics when I'm talking about global autocracy vs. democracy.OdontoBear66 said:Always thought a guy as smart as you could easily differentiate. In that you seem to worry, I understand your post. Oh, and liars wear both suits in politics.dajo9 said:You'll take free speech even if it benefits autocratic liarsOdontoBear66 said:Understand that as I think he does. Big difference he can afford it. You and I probably not. Being a contrarian and libertarian of sorts, I just love the zingers he is shooting across the bow. Sounds like a bunch of nervous nillies at Twitter. 90% plus of you know what persuasion. I'll take free speech whether it benefits moderates, conservatives or even liberals.DiabloWags said:OdontoBear66 said:Very true, but when he started playing games with the company twas time to out for safety. Downside potential became greater than upside winnings.DiabloWags said:OdontoBear66 said:Makes it even better from my glance.Unit2Sucks said:
Twitter employees and stockholders may not agree.
Unless you're a TSLA shareholder.
I just marvel at all the people I would suspect would be all for shutting down woke and increasing free speech as in the 60s are totally against.
You do realize that Musk has a "binding" agreement to purchase Twitter, right?
If he bows out it's gonna cost him a $1.0 Billion break up fee.
That's the downside of playing "games".
For some reason, he's been sounding more like "the Dog ate my homework" with his excuse about Spam.
Ha! That's a good one.BearForce2 said:concordtom said:oski003 said:Don't replace your former conservative echo chamber with a liberal echo chamber. You both talk in absolutes as if the other party is radical.concordtom said:You're going back on my IGNORE list.BearForce2 said:
Inflation sucks but it's also completely irrelevant to the Democrats. Biden has recently said:
1. Systemic racism is our greatest domestic problem.
2. Climate change is our greatest global problem
3. J6 was the worst attack on our democracy since the Civil War
…when in reality, only one is.How to become a “far right extremist” in 5 years or less:
— No Soup for Knowles (@nosoup4knowles) May 17, 2022
Stand still.
But Dwight Eisenhower will think someone stole his line:
GOP Party Platform - 1956
Read it -- the mainstream of the GOP was to the economic Left of where Bernie Sanders is today.
cbbass1 said:Ha! That's a good one.BearForce2 said:concordtom said:oski003 said:Don't replace your former conservative echo chamber with a liberal echo chamber. You both talk in absolutes as if the other party is radical.concordtom said:You're going back on my IGNORE list.BearForce2 said:
Inflation sucks but it's also completely irrelevant to the Democrats. Biden has recently said:
1. Systemic racism is our greatest domestic problem.
2. Climate change is our greatest global problem
3. J6 was the worst attack on our democracy since the Civil War
…when in reality, only one is.How to become a “far right extremist” in 5 years or less:
— No Soup for Knowles (@nosoup4knowles) May 17, 2022
Stand still.
But Dwight Eisenhower will think someone stole his line:
GOP Party Platform - 1956
Read it -- the mainstream of the GOP was to the economic Left of where Bernie Sanders is today.
This is why the Left is pissed that Musk is taking over Twitter -- their entire goal has been to shift the Overton Window in order to hide the fact that they have indeed radicalized. pic.twitter.com/v6qhUPO6HM
— Ben Shapiro (@benshapiro) April 29, 2022
The Dems moved to the far left. Just embrace it, don't be ashamed.
Your discussion in the first paragraph is consistent with the selective provisions I read in the Agreement.Unit2Sucks said:wifeisafurd said:One condition precedent to closing is no violation of reps and warranties and one such R&W was that no SEC filings contain "any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, or are to be made, not misleading." Materially misstating (in this case overstating) the number of actual users violates the contract provision (not to mention violate SEC rules on disclosure such as Rule 10b-5) and have all sorts on consequences. If this is true, Musk could have a lot to different remedies, both contractual ad civil, as could other shareholders. I could see Twitter stock tanking.BearGoggles said:Thank you.DiabloWags said:Filed April 25, 2022BearGoggles said:
Has anyone seen the allegedly "binding" agreement? Has it been filed with the SEC?
DEFA14A (sec.gov)
To 30 seconds to scan the agreement and searched for "Company Material Adverse Effect". It is all over the place, including 4.6, 4.9(b), 4.16(b) (SEC misrepresentations could impact third part contracts, such as advertising).
I am not a corporate attorney, but my understanding is there has been extensive litigation and case law related to MAEs. I have no idea if what Musk is alleging falls in that category but my wild ass guess is that the discovery of misleading SEC filings is potentially an MAE.
With a caveat that I haven't read the agreement, typically the bring down on the reps would be MAE for a public company deal meaning a breach of reps that isn't an MAE wouldn't cause the condition to fail to be satisfied.
I think there is basically no way Musk will be able to successfully argue that bots on Twitter are an MAE on the business. M&A practitioners have varying views on what could constitute an MAE but I don't think this is even close to the line. This is just Musk being Musk.
Where we differ is what the world considers a MAE. Musk's comments speak to the number of "real" users which in the world of company valuation is legitimate monetizable daily active usage or users ("mDAUs) The company said it estimated the average of false or spam accounts represented fewer than 5% of mDAUs during that period.
Twitter now admitted to overstating user numbers by 1.4 million to 1.9 million users over the past three years out of around 290 projected million users. Doesn't sound too bad, but it gets worse.
In March of 2019, Twitter launched a feature that allowed people to link multiple separate accounts together in order to conveniently switch between accounts. Twitter now announced: "An error was made at that time, such that actions taken via the primary account resulted in all linked accounts being counted as mDAU." So they have a bunch a duplicate accounts for the same real live people that they are counting as septette mDAUs. How many? They don't currently know.
But it doesn't stop there. Since Musk started involvement in April the number of follower accounts started dropping off. Twitter called the drop off "organic" and not related to politics and that often times there are less followers when you take action against spammers. Really? Barack Obama, the most followed user on Twitter, whose number had increased every day in April, lost more than 300,000 followers after the announcement that Musk offer was accepted. Katy Perry, the third-most-followed user on Twitter, lost more than 200,000 after the announcement.
A material adverse effect is something that signals a material decline in profitability or the possibility that the company's operations or financial position may be seriously compromised. Let's start with profitability - there is none. If in fact, Twitter overstated its number of monetizing users, the ability to make profits in the future is at risk. There is a similar analysis you go through with operations and financial position, usually dealing with a material impact on asset or liability values or liquidity.
A piece of information is material if it is reasonable to expect that the disclosure of that information will impact the company's stock price. Companies and their accountants continue to find ways to come up with their own definitions of materiality. This involves establishing a numerical threshold (say, 5%) and deciding that anything that falls below the threshold will not be material.
The SEC attempted to prevent companies from hiding "material: items with arbitrary threshold by establishing the following rules:
- An intentional misstatement, even if it involves an immaterial amount, is material because of the intent to mislead.
- Numerical thresholds alone are unacceptable.
- Management must also weigh qualitative matters if the misstatement will hide a change in earnings or concerns a key business segment.
I just want to add that other than one outlier, there has never been a buyer that has been able to use the MAE condition to terminate a merger agreement with a public company.wifeisafurd said:Your discussion in the first paragraph is consistent with the selective provisions I read in the Agreement.Unit2Sucks said:wifeisafurd said:One condition precedent to closing is no violation of reps and warranties and one such R&W was that no SEC filings contain "any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, or are to be made, not misleading." Materially misstating (in this case overstating) the number of actual users violates the contract provision (not to mention violate SEC rules on disclosure such as Rule 10b-5) and have all sorts on consequences. If this is true, Musk could have a lot to different remedies, both contractual ad civil, as could other shareholders. I could see Twitter stock tanking.BearGoggles said:Thank you.DiabloWags said:Filed April 25, 2022BearGoggles said:
Has anyone seen the allegedly "binding" agreement? Has it been filed with the SEC?
DEFA14A (sec.gov)
To 30 seconds to scan the agreement and searched for "Company Material Adverse Effect". It is all over the place, including 4.6, 4.9(b), 4.16(b) (SEC misrepresentations could impact third part contracts, such as advertising).
I am not a corporate attorney, but my understanding is there has been extensive litigation and case law related to MAEs. I have no idea if what Musk is alleging falls in that category but my wild ass guess is that the discovery of misleading SEC filings is potentially an MAE.
With a caveat that I haven't read the agreement, typically the bring down on the reps would be MAE for a public company deal meaning a breach of reps that isn't an MAE wouldn't cause the condition to fail to be satisfied.
I think there is basically no way Musk will be able to successfully argue that bots on Twitter are an MAE on the business. M&A practitioners have varying views on what could constitute an MAE but I don't think this is even close to the line. This is just Musk being Musk.
Where we differ is what the world considers a MAE. Musk's comments speak to the number of "real" users which in the world of company valuation is legitimate monetizable daily active usage or users ("mDAUs) The company said it estimated the average of false or spam accounts represented fewer than 5% of mDAUs during that period.
Twitter now admitted to overstating user numbers by 1.4 million to 1.9 million users over the past three years.
But it gets worse, in March of 2019, Twitter launched a feature that allowed people to link multiple separate accounts together in order to conveniently switch between accounts. Twitter now announced: "An error was made at that time, such that actions taken via the primary account resulted in all linked accounts being counted as mDA." So they have a bunch a duplicate accounts for the same real live people that they are counting as septette mDAUs. But it doesn't stop there. Since Musk started involvement in April the number of flower accounts started dropping off. Twitter called the drop off "organic" and not related to politics and that often times there are less followers when you take action against spammers. Really? Barack Obama, the most followed user on Twitter, whose number had increased every day in April, lost more than 300,000 followers after the announcement that Musk offer was accepted. Katy Perry, the third-most-followed user on Twitter, lost more than 200,000 after the announcement.
A material adverse effect is something that signals a material decline in profitability or the possibility that the company's operations or financial position may be seriously compromised. Let's start with profitability - there is none. If in fact, Twitter overstated its number of monetizing users, the ability to make profits in the future is at risk. There is a similar analysis you go through with operations and financial position, usually dealing with a material impact on asset or liability values or liquidity.
A piece of information is material if it is reasonable to expect that the disclosure of that information will impact the company's stock price. Companies and their accountants continue to find ways to come up with their own definitions of materiality. This involves establishing a numerical threshold (say, 5%) and deciding that anything that falls below the threshold will not be material.
The SEC attempted to prevent companies from hiding "material: items with arbitrary threshold by establishing the following rules:It's pretty clear that Twitter lied about the April disengagement of followers and it seems that was the intent. Twitter has now admitted it had understated false of spam accounts, which may or may not be material or intentional by itself, and then there was a duplication of users who had duplication of accounts under Twitter's own program, which looks quite bad. My guess is the stock tanks, the SEC will be over Twitter like white on rice. That Twitter chose to make public announcements suggests someone at Twitter senior management thought these events were MAEs within SEC standards.
- An intentional misstatement, even if it involves an immaterial amount, is material because of the intent to mislead.
- Numerical thresholds alone are unacceptable.
- Management must also weigh qualitative matters if the misstatement will hide a change in earnings or concerns a key business segment.
Besides, without having read the merger agreement, the M&A market, even now, is so seller friendly that most buyers rely on reps and warranties insurance instead of reps and warranties with a bring-down closing condition. Deal certainty has definitely shifted to seller's favor over the last few years. Most agreements are pretty much hell or high water closing conditions. I would be shocked if Musk has a lot of room to terminate an agreement. Sounds like a lot of white noise.
I'm assuming you are talking about public takeover type acquisitions, because in different situations, the mergers can and do fall apart, as we both know. But having read the agreement, yes Musk can walk on the breach of a R&W. Will that happen - as opposed to this being white noise or causing a price adjustment - not likely. It is likely Musk wanting a better deal based on a succession of bad public announcements by the company.calbear93 said:I just want to add that other than one outlier, there has never been a buyer that has been able to use the MAE condition to terminate a merger agreement with a public company.wifeisafurd said:Your discussion in the first paragraph is consistent with the selective provisions I read in the Agreement.Unit2Sucks said:wifeisafurd said:One condition precedent to closing is no violation of reps and warranties and one such R&W was that no SEC filings contain "any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, or are to be made, not misleading." Materially misstating (in this case overstating) the number of actual users violates the contract provision (not to mention violate SEC rules on disclosure such as Rule 10b-5) and have all sorts on consequences. If this is true, Musk could have a lot to different remedies, both contractual ad civil, as could other shareholders. I could see Twitter stock tanking.BearGoggles said:Thank you.DiabloWags said:Filed April 25, 2022BearGoggles said:
Has anyone seen the allegedly "binding" agreement? Has it been filed with the SEC?
DEFA14A (sec.gov)
To 30 seconds to scan the agreement and searched for "Company Material Adverse Effect". It is all over the place, including 4.6, 4.9(b), 4.16(b) (SEC misrepresentations could impact third part contracts, such as advertising).
I am not a corporate attorney, but my understanding is there has been extensive litigation and case law related to MAEs. I have no idea if what Musk is alleging falls in that category but my wild ass guess is that the discovery of misleading SEC filings is potentially an MAE.
With a caveat that I haven't read the agreement, typically the bring down on the reps would be MAE for a public company deal meaning a breach of reps that isn't an MAE wouldn't cause the condition to fail to be satisfied.
I think there is basically no way Musk will be able to successfully argue that bots on Twitter are an MAE on the business. M&A practitioners have varying views on what could constitute an MAE but I don't think this is even close to the line. This is just Musk being Musk.
Where we differ is what the world considers a MAE. Musk's comments speak to the number of "real" users which in the world of company valuation is legitimate monetizable daily active usage or users ("mDAUs) The company said it estimated the average of false or spam accounts represented fewer than 5% of mDAUs during that period.
Twitter now admitted to overstating user numbers by 1.4 million to 1.9 million users over the past three years.
But it gets worse, in March of 2019, Twitter launched a feature that allowed people to link multiple separate accounts together in order to conveniently switch between accounts. Twitter now announced: "An error was made at that time, such that actions taken via the primary account resulted in all linked accounts being counted as mDA." So they have a bunch a duplicate accounts for the same real live people that they are counting as septette mDAUs. But it doesn't stop there. Since Musk started involvement in April the number of flower accounts started dropping off. Twitter called the drop off "organic" and not related to politics and that often times there are less followers when you take action against spammers. Really? Barack Obama, the most followed user on Twitter, whose number had increased every day in April, lost more than 300,000 followers after the announcement that Musk offer was accepted. Katy Perry, the third-most-followed user on Twitter, lost more than 200,000 after the announcement.
A material adverse effect is something that signals a material decline in profitability or the possibility that the company's operations or financial position may be seriously compromised. Let's start with profitability - there is none. If in fact, Twitter overstated its number of monetizing users, the ability to make profits in the future is at risk. There is a similar analysis you go through with operations and financial position, usually dealing with a material impact on asset or liability values or liquidity.
A piece of information is material if it is reasonable to expect that the disclosure of that information will impact the company's stock price. Companies and their accountants continue to find ways to come up with their own definitions of materiality. This involves establishing a numerical threshold (say, 5%) and deciding that anything that falls below the threshold will not be material.
The SEC attempted to prevent companies from hiding "material: items with arbitrary threshold by establishing the following rules:It's pretty clear that Twitter lied about the April disengagement of followers and it seems that was the intent. Twitter has now admitted it had understated false of spam accounts, which may or may not be material or intentional by itself, and then there was a duplication of users who had duplication of accounts under Twitter's own program, which looks quite bad. My guess is the stock tanks, the SEC will be over Twitter like white on rice. That Twitter chose to make public announcements suggests someone at Twitter senior management thought these events were MAEs within SEC standards.
- An intentional misstatement, even if it involves an immaterial amount, is material because of the intent to mislead.
- Numerical thresholds alone are unacceptable.
- Management must also weigh qualitative matters if the misstatement will hide a change in earnings or concerns a key business segment.
Besides, without having read the merger agreement, the M&A market, even now, is so seller friendly that most buyers rely on reps and warranties insurance instead of reps and warranties with a bring-down closing condition. Deal certainty has definitely shifted to seller's favor over the last few years. Most agreements are pretty much hell or high water closing conditions. I would be shocked if Musk has a lot of room to terminate an agreement. Sounds like a lot of white noise.
Tell me again what I am thinking dajo. Oh, please!!!dajo9 said:It's quaint that you think I'm talking about politics when I'm talking about global autocracy vs. democracy.OdontoBear66 said:Always thought a guy as smart as you could easily differentiate. In that you seem to worry, I understand your post. Oh, and liars wear both suits in politics.dajo9 said:You'll take free speech even if it benefits autocratic liarsOdontoBear66 said:Understand that as I think he does. Big difference he can afford it. You and I probably not. Being a contrarian and libertarian of sorts, I just love the zingers he is shooting across the bow. Sounds like a bunch of nervous nillies at Twitter. 90% plus of you know what persuasion. I'll take free speech whether it benefits moderates, conservatives or even liberals.DiabloWags said:OdontoBear66 said:Very true, but when he started playing games with the company twas time to out for safety. Downside potential became greater than upside winnings.DiabloWags said:OdontoBear66 said:Makes it even better from my glance.Unit2Sucks said:
Twitter employees and stockholders may not agree.
Unless you're a TSLA shareholder.
I just marvel at all the people I would suspect would be all for shutting down woke and increasing free speech as in the 60s are totally against.
You do realize that Musk has a "binding" agreement to purchase Twitter, right?
If he bows out it's gonna cost him a $1.0 Billion break up fee.
That's the downside of playing "games".
For some reason, he's been sounding more like "the Dog ate my homework" with his excuse about Spam.
I am talking about using the no MAE closing condition to get out of a merger agreement with a public company. Until a complete outlier case in 2017 where the facts were pretty outrageous, no court had ever interpreted the MAE to permit a buyer to terminate a merger agreement. For M&A lawyers, the MAE condition was heavily negotiated knowing it would never be used (again other than the 2017 Akorn case).wifeisafurd said:I'm assuming you are talking about public takeover type acquisitions, because in different situations, the mergers can and do fall apart, as we both know. But having read the agreement, yes Musk can walk on the breach of a R&W. Will that happen - as opposed to this being white noise or causing a price adjustment - not likely. It is likely Musk wanting a better deal based on a succession of bad public announcements by the company.calbear93 said:I just want to add that other than one outlier, there has never been a buyer that has been able to use the MAE condition to terminate a merger agreement with a public company.wifeisafurd said:Your discussion in the first paragraph is consistent with the selective provisions I read in the Agreement.Unit2Sucks said:wifeisafurd said:One condition precedent to closing is no violation of reps and warranties and one such R&W was that no SEC filings contain "any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, or are to be made, not misleading." Materially misstating (in this case overstating) the number of actual users violates the contract provision (not to mention violate SEC rules on disclosure such as Rule 10b-5) and have all sorts on consequences. If this is true, Musk could have a lot to different remedies, both contractual ad civil, as could other shareholders. I could see Twitter stock tanking.BearGoggles said:Thank you.DiabloWags said:Filed April 25, 2022BearGoggles said:
Has anyone seen the allegedly "binding" agreement? Has it been filed with the SEC?
DEFA14A (sec.gov)
To 30 seconds to scan the agreement and searched for "Company Material Adverse Effect". It is all over the place, including 4.6, 4.9(b), 4.16(b) (SEC misrepresentations could impact third part contracts, such as advertising).
I am not a corporate attorney, but my understanding is there has been extensive litigation and case law related to MAEs. I have no idea if what Musk is alleging falls in that category but my wild ass guess is that the discovery of misleading SEC filings is potentially an MAE.
With a caveat that I haven't read the agreement, typically the bring down on the reps would be MAE for a public company deal meaning a breach of reps that isn't an MAE wouldn't cause the condition to fail to be satisfied.
I think there is basically no way Musk will be able to successfully argue that bots on Twitter are an MAE on the business. M&A practitioners have varying views on what could constitute an MAE but I don't think this is even close to the line. This is just Musk being Musk.
Where we differ is what the world considers a MAE. Musk's comments speak to the number of "real" users which in the world of company valuation is legitimate monetizable daily active usage or users ("mDAUs) The company said it estimated the average of false or spam accounts represented fewer than 5% of mDAUs during that period.
Twitter now admitted to overstating user numbers by 1.4 million to 1.9 million users over the past three years.
But it gets worse, in March of 2019, Twitter launched a feature that allowed people to link multiple separate accounts together in order to conveniently switch between accounts. Twitter now announced: "An error was made at that time, such that actions taken via the primary account resulted in all linked accounts being counted as mDA." So they have a bunch a duplicate accounts for the same real live people that they are counting as septette mDAUs. But it doesn't stop there. Since Musk started involvement in April the number of flower accounts started dropping off. Twitter called the drop off "organic" and not related to politics and that often times there are less followers when you take action against spammers. Really? Barack Obama, the most followed user on Twitter, whose number had increased every day in April, lost more than 300,000 followers after the announcement that Musk offer was accepted. Katy Perry, the third-most-followed user on Twitter, lost more than 200,000 after the announcement.
A material adverse effect is something that signals a material decline in profitability or the possibility that the company's operations or financial position may be seriously compromised. Let's start with profitability - there is none. If in fact, Twitter overstated its number of monetizing users, the ability to make profits in the future is at risk. There is a similar analysis you go through with operations and financial position, usually dealing with a material impact on asset or liability values or liquidity.
A piece of information is material if it is reasonable to expect that the disclosure of that information will impact the company's stock price. Companies and their accountants continue to find ways to come up with their own definitions of materiality. This involves establishing a numerical threshold (say, 5%) and deciding that anything that falls below the threshold will not be material.
The SEC attempted to prevent companies from hiding "material: items with arbitrary threshold by establishing the following rules:It's pretty clear that Twitter lied about the April disengagement of followers and it seems that was the intent. Twitter has now admitted it had understated false of spam accounts, which may or may not be material or intentional by itself, and then there was a duplication of users who had duplication of accounts under Twitter's own program, which looks quite bad. My guess is the stock tanks, the SEC will be over Twitter like white on rice. That Twitter chose to make public announcements suggests someone at Twitter senior management thought these events were MAEs within SEC standards.
- An intentional misstatement, even if it involves an immaterial amount, is material because of the intent to mislead.
- Numerical thresholds alone are unacceptable.
- Management must also weigh qualitative matters if the misstatement will hide a change in earnings or concerns a key business segment.
Besides, without having read the merger agreement, the M&A market, even now, is so seller friendly that most buyers rely on reps and warranties insurance instead of reps and warranties with a bring-down closing condition. Deal certainty has definitely shifted to seller's favor over the last few years. Most agreements are pretty much hell or high water closing conditions. I would be shocked if Musk has a lot of room to terminate an agreement. Sounds like a lot of white noise.
Of course deals have fallen apart, including for anti-trust hold up, especially if a regulator requested the buyer to sell a crown jewel. Or if the shareholders do not approve, subject to payment of a break-up fee by the seller. But MAE has never been used successfully prior or after the Akorn case.
Also, with PE having shifted the risk allocation on deal certainty risk to the buyer in the last 4 or five years, merger agreements in general but most definitely in a situation like a semi hostile like this will have deal certainty in favor of the seller.
This is a very weird acquisition where Musk appears to be a Whit ekNight for some Director and engaged in a hostile takeover by others.calbear93 said:I am talking about using the no MAE closing condition to get out of a merger agreement with a public company. Until a complete outlier case in 2017 where the facts were pretty outrageous, no court had ever interpreted the MAE to permit a buyer to terminate a merger agreement. For M&A lawyers, the MAE condition was heavily negotiated knowing it would never be used (again other than the 2017 Akorn case).wifeisafurd said:I'm assuming you are talking about public takeover type acquisitions, because in different situations, the mergers can and do fall apart, as we both know. But having read the agreement, yes Musk can walk on the breach of a R&W. Will that happen - as opposed to this being white noise or causing a price adjustment - not likely. It is likely Musk wanting a better deal based on a succession of bad public announcements by the company.calbear93 said:I just want to add that other than one outlier, there has never been a buyer that has been able to use the MAE condition to terminate a merger agreement with a public company.wifeisafurd said:Your discussion in the first paragraph is consistent with the selective provisions I read in the Agreement.Unit2Sucks said:wifeisafurd said:One condition precedent to closing is no violation of reps and warranties and one such R&W was that no SEC filings contain "any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, or are to be made, not misleading." Materially misstating (in this case overstating) the number of actual users violates the contract provision (not to mention violate SEC rules on disclosure such as Rule 10b-5) and have all sorts on consequences. If this is true, Musk could have a lot to different remedies, both contractual ad civil, as could other shareholders. I could see Twitter stock tanking.BearGoggles said:Thank you.DiabloWags said:Filed April 25, 2022BearGoggles said:
Has anyone seen the allegedly "binding" agreement? Has it been filed with the SEC?
DEFA14A (sec.gov)
To 30 seconds to scan the agreement and searched for "Company Material Adverse Effect". It is all over the place, including 4.6, 4.9(b), 4.16(b) (SEC misrepresentations could impact third part contracts, such as advertising).
I am not a corporate attorney, but my understanding is there has been extensive litigation and case law related to MAEs. I have no idea if what Musk is alleging falls in that category but my wild ass guess is that the discovery of misleading SEC filings is potentially an MAE.
With a caveat that I haven't read the agreement, typically the bring down on the reps would be MAE for a public company deal meaning a breach of reps that isn't an MAE wouldn't cause the condition to fail to be satisfied.
I think there is basically no way Musk will be able to successfully argue that bots on Twitter are an MAE on the business. M&A practitioners have varying views on what could constitute an MAE but I don't think this is even close to the line. This is just Musk being Musk.
Where we differ is what the world considers a MAE. Musk's comments speak to the number of "real" users which in the world of company valuation is legitimate monetizable daily active usage or users ("mDAUs) The company said it estimated the average of false or spam accounts represented fewer than 5% of mDAUs during that period.
Twitter now admitted to overstating user numbers by 1.4 million to 1.9 million users over the past three years.
But it gets worse, in March of 2019, Twitter launched a feature that allowed people to link multiple separate accounts together in order to conveniently switch between accounts. Twitter now announced: "An error was made at that time, such that actions taken via the primary account resulted in all linked accounts being counted as mDA." So they have a bunch a duplicate accounts for the same real live people that they are counting as septette mDAUs. But it doesn't stop there. Since Musk started involvement in April the number of flower accounts started dropping off. Twitter called the drop off "organic" and not related to politics and that often times there are less followers when you take action against spammers. Really? Barack Obama, the most followed user on Twitter, whose number had increased every day in April, lost more than 300,000 followers after the announcement that Musk offer was accepted. Katy Perry, the third-most-followed user on Twitter, lost more than 200,000 after the announcement.
A material adverse effect is something that signals a material decline in profitability or the possibility that the company's operations or financial position may be seriously compromised. Let's start with profitability - there is none. If in fact, Twitter overstated its number of monetizing users, the ability to make profits in the future is at risk. There is a similar analysis you go through with operations and financial position, usually dealing with a material impact on asset or liability values or liquidity.
A piece of information is material if it is reasonable to expect that the disclosure of that information will impact the company's stock price. Companies and their accountants continue to find ways to come up with their own definitions of materiality. This involves establishing a numerical threshold (say, 5%) and deciding that anything that falls below the threshold will not be material.
The SEC attempted to prevent companies from hiding "material: items with arbitrary threshold by establishing the following rules:It's pretty clear that Twitter lied about the April disengagement of followers and it seems that was the intent. Twitter has now admitted it had understated false of spam accounts, which may or may not be material or intentional by itself, and then there was a duplication of users who had duplication of accounts under Twitter's own program, which looks quite bad. My guess is the stock tanks, the SEC will be over Twitter like white on rice. That Twitter chose to make public announcements suggests someone at Twitter senior management thought these events were MAEs within SEC standards.
- An intentional misstatement, even if it involves an immaterial amount, is material because of the intent to mislead.
- Numerical thresholds alone are unacceptable.
- Management must also weigh qualitative matters if the misstatement will hide a change in earnings or concerns a key business segment.
Besides, without having read the merger agreement, the M&A market, even now, is so seller friendly that most buyers rely on reps and warranties insurance instead of reps and warranties with a bring-down closing condition. Deal certainty has definitely shifted to seller's favor over the last few years. Most agreements are pretty much hell or high water closing conditions. I would be shocked if Musk has a lot of room to terminate an agreement. Sounds like a lot of white noise.
Of course deals have fallen apart, including for anti-trust hold up, especially if a regulator requested the buyer to sell a crown jewel. Or if the shareholders do not approve, subject to payment of a break-up fee by the seller. But MAE has never been used successfully prior or after the Akorn case.
Also, with PE having shifted the risk allocation on deal certainty risk to the buyer in the last 4 or five years, merger agreements in general but most definitely in a situation like a semi hostile like this will have deal certainty in favor of the seller.
Here is the condition precedent termination provision:
...each of the representations and warranties of the Company contained in this Agreement (except for the representations and warranties contained in Section 4.2(a) and Section 4.2(b)), without giving effect to any materiality or "Company Material Adverse Effect" qualifications therein, shall be true and correct as of the Closing Date (except to the extent such representations and warranties are expressly made as of a specific date, in which case such representations and warranties shall be so true and correct as of such specific date only), except for such failures to be true and correct as would not have a Company Material Adverse Effect; and (ii) each of the representations and warranties contained in Section 4.2(a) and Section 4.2(b) shall be shall be true and correct in all material respects as of the Closing Date (except to the extent such representations and warranties are expressly made as of a specific date, in which case such representations and warranties shall be so true and correct in all material respects as of such specific date only);
Here are what I think are the applicable reps and warranties:
4.5 (b) Neither the Company nor any of its Subsidiaries is in default or violation of any Law applicable to the Company, any of its Subsidiaries or by which any of their respective properties or assets are bound, except for any such defaults or violations that would not have a Company Material Adverse Effect. Notwithstanding the foregoing, no representation or warranty in Section 4.5(a) or this Section 4.5(b) is made with respect to Company SEC Documents or financial statements, "disclosure controls and procedures" or "internal control over financial reporting," employee benefits matters, Intellectual Property Rights matters, Tax matters, which are addressed exclusively in Section 4.6 (Company SEC Documents; Financial Statements),Section 4.8 (Disclosure Controls and Procedures), Section 4.12 (Employee Benefit Plans), Section 4.14 (Intellectual Property Rights), Section 4.15 (Taxes), respectively.
Section 4.6 Company SEC Documents; Financial Statements.
(a) Since January 1, 2022, the Company has filed or furnished with the SEC all material forms, documents and reports required to be filed or furnished prior to the date of this Agreement by it with the SEC (such forms, documents and reports filed with the SEC, including any amendments or supplements thereto and any exhibits or other documents attached to or incorporated by reference therein, the "Company SEC Documents"). As of their respective dates, or, if amended or supplemented, as of the date of the last such amendment or supplement, the Company SEC Documents complied in all material respects with the requirements of the Securities Act and the Exchange Act, as the case may be, and the applicable rules and regulations promulgated thereunder, and none of the Company SEC Documents at the time it was filed (or, if amended or supplemented, as of the date of the last amendment or supplement) contained any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, or are to be made, not misleading.
(b) The consolidated financial statements (including all related notes) of the Company included in the Company SEC Documents fairly present in all material respects the consolidated financial position of the Company and its consolidated Subsidiaries as at the respective dates thereof and its consolidated statements of operations and consolidated statements of cash flows for the respective periods then ended (subject, in the case of unaudited interim statements, to normal year-end audit adjustments, none of which would have a Company Material Adverse Effect, to the absence of notes and to any other adjustments described therein, including in any notes thereto) in conformity with GAAP (except, in the case of unaudited statements, as permitted by Form 10-Q, Form 8-K or any successor form or other rules under the Exchange Act).
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